2017 (10) TMI 1399

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....,61.305/- treated by learned DCIT as expenses attributable to earning dividend income and did not hold that no expenses have been incurred to earn the said income.   2. That on the facts and in the circumstances of the case, the learned CIT (Appeals) erred in not holding that provision for leave encashment of Rs. 17,63,884/- is neither statutory liability nor contingent liability and therefore not to be considered for the purpose of computing disallowance u/s.43B(f) of the I.T. Act, 1961.   3. That on the facts and in the circumstances of the case, the Learned CIT (Appeals) erred in not holding that Penalty of Rs. 24,000/- is not paid for violation of any law and therefore the same is allowable as business expenditure.   That the appellant craves leave to. add to. alter amend and/or withdraw all or any of the above grounds at or before the hearing of the appeal."   3. We have heard the ld. Senior Counsel Shri J.P. Khaitan, on behalf of the assessee and Shri Arindam Bhattacharjee, on behalf of the Revenue. On careful consideration of the papers on record, case laws cited and orders of the Authorities below, we hold as follows:- 4. ....

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.... decision to the facts of this case and determine the disallowance under Rule 8D2(ii) of the Rules. The claim of the assessee that it has made strategic investments and that these investments should not be considered while computing disallowance under Rule 8D2(ii) of the Rules, has also to be adjudicted by the Assessing Officer. 6. The Hon'ble Special Bench of the ITAT in the case of ACIT vs. Vireet Investment Pvt Ltd. held that only those investments are to be considered for computing the average value of investment which yielded exempt income during the year. 6.1. The Assessing Officer is directed to apply this proposition of law and work out the disallowance, if any, under Rule 8D2(ii) of the Act. Accordingly, this ground of the assessee is allowed for statistical purposes. 7. Ground No. 2 is on the disallowance of the provisions for leave encashment. 7.1. We find that the Kolkata 'A' Bench of the Tribunal in the assessee's own case for the Assessment Year 2007-08, while adjudicating the same issue remitted the issue to the file of the Assessing Officer to decide the same taking into consideration the outcome of the case in SLP civil 22889/2008 of the file of the Hon....

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....07-08 and AY 2008 09 and the issue was decided in favour of the appellant in Appeal No.428/XII/R-12/10-11 Dated 12.03.2013 & Appeal No. 475/XII/12/08-09 dated 13.01.2014 following the above mentioned orders of the jurisdictional ITAT, Kolkata.  In the light of the above discussion & findings, after perusing the facts of the case and respectfully following the decision of the Hon'ble Jurisdictional Tribunal in the case of the appellant and the Appellate Orders for A Y 2007-08 & A Y 2008 09, the addition made by the AO is directed to be deleted. Hence, this ground of appeal is allowed."   12. We find that the Tribunal in the assessee's own case on the very same issue for the Assessment Year 2004-05 up to Assessment Year 2008-09, has adjudicated the issue in favour of the assessee. It was held that rent realized from staff, insurance claim realized in respect of damage of goods, excess liability from sundry creditors written back, for revenue expenses and miscellaneous incomes and receipts including duty draw back have to be treated as income from business and have to be considered while calculating deduction u/s 10B of the Act. The Hon'ble Calcutta High Court in the asse....

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....rward contracts were no by way of trading as such in foreign exchange derivatives. Hence, Instruction No. 3/201 cannot be made applicable to the facts of the instant case. We find that the decision relie upon by the ld AR on the decision of the Hon'ble Bombay High Court supra is in favour o the assessee wherein the question raised before the Hon'ble Court and the decision rendere thereon is as under:- PPELLATE TRIBUNAL "The Revenue has urged the following question of law for our consideration:- "Whether on the facts and in the circumstances of th case and in law, the Tribunal was justified in deleting the addition of 'Mark to Market' Loss of Rs. 78,10,000/- made by the Assessing Officer on account of disallowance of loss on foreign exchange forward contract loss and not appreciating the fact that the said loss was a notional loss and hence cannot be allowed? ncln a^n;rrnaln h + in fearn Archnsro The ancornee's forward contracts were 7. The impugned order of the Tribunal has, while upholding the finding of the CIT (Appeals), independently. come to the conclusion that the transaction entered into by the Respondent assessee is not in the....